BILL NUMBER: SB 819	CHAPTERED  07/22/99

	CHAPTER   151
	FILED WITH SECRETARY OF STATE   JULY 22, 1999
	APPROVED BY GOVERNOR   JULY 22, 1999
	PASSED THE ASSEMBLY   JULY 15, 1999
	PASSED THE SENATE   APRIL 29, 1999
	AMENDED IN SENATE   APRIL 5, 1999

INTRODUCED BY   Senator Sher

                        FEBRUARY 25, 1999

   An act to add Sections 32121.7 and 32121.8 to the Health and
Safety Code, relating to health care districts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 819, Sher.  El Camino Hospital District.
   Existing law, the Local Health Care District Law, provides for the
formation of local health care districts, and authorizes a district
to transfer, at fair market value, any part of its assets to one or
more corporations to operate and maintain the assets, subject to
certain requirements, including the approval of a majority of the
voters of the district in certain circumstances.  Existing law also
authorizes the transfer of a district's assets, for the benefit of
the communities served by the district, in the absence of adequate
consideration, subject to certain requirements.
   This bill would impose similar requirements on the transfer of
assets by El Camino Hospital, a nonprofit public benefit corporation
that owns and operates El Camino Hospital pursuant to a transfer of
assets from the El Camino Hospital District under the above-described
provisions.  This bill would declare that, due to the unique
circumstances applicable to El Camino Hospital, a general statute
within the meaning of specified provisions of the California
Constitution cannot be made applicable and a special statute is
necessary.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 32121.7 is added to the Health and Safety Code,
to read:
   32121.7.  Notwithstanding any other provision of law, the transfer
of assets by El Camino Hospital, a California nonprofit public
benefit corporation ("El Camino Hospital-Corporation") that owns and
operates El Camino Hospital, located in the City of Mountain View,
pursuant to a transfer and ground lease from the El Camino Hospital
District pursuant to subdivision (p) of Section 32121, is subject to
this section.
   (a) Before El Camino Hospital-Corporation transfers 50 percent or
more of its assets, at fair market value, to one or more
corporations, trusts, associations, partnerships, limited liability
companies, or other entities or persons, in sum or by increment, the
Board of Directors of El Camino Hospital District shall, by
resolution, submit to the voters of the El Camino Hospital District a
measure proposing the transfer.  The measure shall be placed on the
ballot of the special election held upon the request of the El Camino
Hospital District or the ballot of the next regularly scheduled
election occurring at least 88 days after the resolution of the Board
of El Camino Hospital District.  If a majority of the voters voting
on the measure vote in favor, the transfer shall be approved.  The
campaign disclosure requirements applicable to local measures
provided under Chapter 4 (commencing with Section 84100) of Title 9
of the Government Code shall apply to this election.
   (b) El Camino Hospital-Corporation may transfer, for the benefit
of the community served by the El Camino Hospital District, in the
absence of adequate consideration, any part of the assets of El
Camino Hospital-Corporation, including without limitation, the El
Camino Hospital, the real property, equipment and other fixed assets,
current assets, and cash, relating to the operation of El Camino
Hospital to one or more nonprofit corporations, trusts, or
associations to operate and maintain the assets.
   (1) Any transfer of 50 percent or more of El Camino
Hospital-Corporation's assets in sum or by increment, pursuant to
this subdivision shall be deemed to be for the benefit of the
community served by the El Camino Hospital District only if all of
the following occur:
   (A) The transfer agreement and all arrangements necessary thereto
are approved by the Board of Directors of El Camino Hospital
District, and the agreement and arrangements are fully discussed in
advance of the board's decision to transfer the assets of El Camino
Hospital-Corporation, in at least five properly noticed open and
public meetings of the Board of Directors of El Camino Hospital
District in compliance with Section 32106 and the Ralph M.  Brown Act
(Chapter 9 (commencing with Section 54950) of Part 1 of Division 2
of Title 5 of the Government Code).
   (B) The transfer agreement provides that the El Camino Hospital
District shall approve all initial board members of the nonprofit
corporation, trust, or association, and any subsequent board members
as may be specified in the transfer agreement.
   (C) The transfer agreement provides that all assets transferred to
the nonprofit corporation, trust, or association, and all assets
accumulated by the nonprofit corporation, trust, or association
during the term of the transfer agreement arising out of or from the
operation of the transferred assets shall be transferred back to the
El Camino Hospital District upon termination of the transfer
agreement, including any extension of the transfer agreement.
   (D) The transfer agreement commits the nonprofit corporation,
trust, or association to operate and maintain the assets of El Camino
Hospital-Corporation for the benefit of the community served by the
El Camino Hospital District.
   (E) The transfer agreement requires that any funds received from
the El Camino Hospital-Corporation at the outset of the agreement or
any time thereafter during the term of the agreement be used only to
reduce the El Camino Hospital-Corporation indebtedness, to acquire
needed equipment for the El Camino Hospital-Corporation health care
facilities, to operate, maintain, and make needed capital
improvements to those health care facilities, to provide supplemental
health care services or facilities for the communities served by the
El Camino Hospital District, or to conduct other activities that
would further a valid public purpose if undertaken directly by the El
Camino Hospital District.
   (2) A transfer of 33 percent or more but less than 50 percent of
the El Camino Hospital-Corporation's assets, in sum or by increment,
pursuant to this subdivision shall be deemed to be for the benefit of
the communities served by the El Camino Hospital District only if
both of the following occur:
   (A) The transfer agreement and all arrangements necessary thereto
are approved by the Board of Directors of El Camino Hospital District
and the agreement and arrangements are fully discussed in advance of
the board's decision to transfer the assets of El Camino
Hospital-Corporation in at least two properly noticed open and public
meetings of the Board of Directors of El Camino Hospital District in
compliance with Section 32106 and the Ralph M.  Brown Act (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title 5
of the Government Code).
   (B) The transfer agreement meets all of the requirements of
subparagraphs (B) to (E), inclusive, of paragraph (1).
   (3) A transfer of 10 percent or more but less than 33 percent of
the El Camino Hospital-Corporation's assets, in sum or by increment,
pursuant to this subdivision shall be deemed to be for the benefit of
the communities served by the El Camino Hospital District only if
both of the following occur:
   (A) The transfer agreement and all arrangements necessary thereto
are approved by the Board of Directors of El Camino Hospital District
and the agreement and arrangements are fully discussed in advance of
the board's decision to transfer the assets of El Camino
Hospital-Corporation in at least two properly noticed open and public
meetings of the Board of Directors of El Camino Hospital District in
compliance with Section 32106 and the Ralph M.  Brown Act (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title 5
of the Government Code).
   (B) The transfer agreements meets all of the requirements of
subparagraphs (C) to (E), inclusive, of paragraph (1).
   (4) Before El Camino Hospital-Corporation transfers, pursuant to
this subdivision, 50 percent or more of its assets to one or more
nonprofit corporations, trusts, or associations, in sum or by
increment, the Board of Directors of El Camino Hospital District
shall, by resolution, submit to the voters of the El Camino Hospital
District a measure proposing the transfer. The measure shall be
placed on the ballot of a special election held upon the request of
El Camino Hospital District or the ballot of the next regularly
scheduled election occurring at least 88 days after the resolution of
the El Camino Hospital District.  If a majority of the voters voting
on the measure vote in its favor, the transfer shall be approved.
The campaign disclosure requirements applicable to local measures
provided under Chapter 4 (commencing with Section 84100) of Title 9
of the Government Code shall apply to this election.
   (5) Notwithstanding any other provision of this subdivision, El
Camino Hospital-Corporation shall not transfer any portion of its
assets to a private nonprofit corporation, trust, or association that
is owned or controlled by a religious creed, church, or sectarian
denomination in the absence of adequate consideration.
   (c) If the El Camino Hospital-Corporation board has previously
transferred less than 50 percent of its assets pursuant to this
subdivision, before any additional assets are transferred, the board
shall hold a public hearing and shall make a public determination
that the additional assets to be transferred will not, in combination
with any assets previously transferred, equal 50 percent or more of
the total assets.
   (d) For purposes of this section, a "transfer" means the transfer
of ownership of the assets of El Camino Hospital-Corporation.  A
lease of the real property or the tangible personal property of El
Camino Hospital District shall not be subject to this section except
as required under Section 32121.4 or Section 32121.8.
   (e) If El Camino Hospital District requests a special election
pursuant to subdivision (a) or (b) it shall reimburse counties for
the costs of that special election as prescribed pursuant to Section
10520 of the Elections Code.
   (f) The limitations set forth in subdivisions (a) and (b) shall
not apply to any transfers, sales, leases, or other assignments of
assets from El Camino Hospital-Corporation to El Camino Hospital
District or entities controlled by El Camino Hospital District,
provided that in the case of a transfer to an entity controlled by El
Camino Hospital District, that entity shall continue to be governed
by this section, imposing the same requirements on such entity as are
imposed on El Camino Hospital-Corporation.
   (g) Nothing in this section shall limit, modify, or otherwise
alter the requirements imposed on El Camino Hospital-Corporation as a
nonprofit corporation under the Corporations Code, including
Attorney General notice and consent requirements if applicable.
  SEC. 2.  Section 32121.8 is added to the Health and Safety Code, to
read:
   32121.8.  The El Camino Hospital-Corporation may provide for the
operation and maintenance through tenants of the whole or any part of
the El Camino Hospital, and for that purpose may enter into any
lease agreement that it believes will best serve the interest of the
El Camino Hospital District. A lease entered into with one or more
corporations, partnerships, limited liability companies or other
entities or persons for the operation of 50 percent or more of the El
Camino Hospital, or that is part of or contingent upon a transfer of
50 percent or more of the El Camino Hospital-Corporation's assets,
in sum or by increment, as described in Section 32127.7 shall be
subject to the requirements of Section 32121.7.  Any lease for the
operation of El Camino Hospital shall require the tenant or lessee to
comply with Section 32128.  No lease for the operation of the entire
hospital shall run for a term in excess of 30 years.  No lease for
the operation of less than the entire hospital shall run for a term
in excess of 10 years.
  SEC. 3.  The Legislature finds and declares that, because of the
unique relationship between El Camino Hospital, a California
nonprofit public benefit corporation and El Camino Hospital District,
a political subdivision of the State of California and the unique
circumstances applicable to the ownership and operation of El Camino
Hospital, located in the City of Mountain View, a statute of general
applicability cannot be enacted within the meaning of Section 16 of
Article IV of the California Constitution, and therefore, a special
statute is necessary.
